The Internet of Things: 2015

“The Internet of Things will be as transformative to the world as was the Industrial Revolution”

What is the Internet

of Things? noun: A network of internet-connected objects able to
collect and exchange data. Commonly abbreviated IoT.

The IoT Ecosystem

The IoT ecosystem enables entities
to connect to, and control, their
IoT devices. Analytics
In  the  ecosystem,  an  en.ty  uses  a  
Data Storage
remote  (e.g.  smartphone,  tablet,  
etc.)  to  send  a  command,  or  a  
request  for  informa.on,  over  a   Remote
network  to  an  IoT  device.  The  
Command/RFI

device  then  performs  the  

command  and/or  sends  
Analysis

informa.on  back  over  the  

network  to  be  analyzed  and   IoT Devices
displayed  on  the  remote.  There  
are  mul.ple  loca.ons  in  which  
the  data  generated  by  the  IoT  
device  can  be  analyzed  and  
stored,  including  the  cloud,  a  
local  database,  on  the  remote,  or  
locally,  on  the  IoT  device  itself. Gateway
Internet Network

Market Drivers And Barriers

Four Market Drivers Four Barriers
• Expanded internet • Security concerns
connectivity • Privacy concerns
• High mobile adoption • Implementation problems
• Technological
• Low-cost sensors fragmentation
• Large IoT investments

Sizing The Market

30
41%
Devices Installed (Billions)

CAGR — total 25
24 IoT devices
installed
BILLION 20

There will be 24 15
billion IoT devices
installed by 2020 10

-
2015E 2016E 2017E 2018E 2019E 2020E

Application
Development

Device Hardware

System Integration
$6 TRILLION
Data Storage Amount
INVESTED Spent
$6 trillion will be invested Security 2015-
on IoT solutions over the 2020
next five years Connectivity

$0 $1 $2 $3
USD (Trillions)
$14

$12

$10
$13
USD (Trillions)

$8
TRILLION ROI $6
Total investments over
the next five years will $4
generate $13 trillion
$2
by 2025
$0
Compound Investment ROI 2015-2025
2015-2020

The three entities using IoT ecosystems

include businesses, governments and
consumers.

Businesses

Governments 11.2B Devices Installed

Consumers 7.7B Devices Installed
By 2020

By 2020
5B Devices Installed
By 2020 $3B Spent (2015-2020)
$2.1B Spent (2015-2020)
$900M Spent (2015-2020)
$7.6B ROI (2015-2025)
$4.7B ROI (2015-2025)
$400M ROI (2015-2025)

Environments
Many environments from the three entities will benefit from utilizing IoT ecosystems.

Manufacturing Oil, gas, and mining

35% of manufacturers already use smart We estimate 5.4 million IoT devices will be
sensors, 10% plan to implement them used on oil extraction sites by 2020. The
within a year, and 8% plan to implement devices will primarily be internet-
them within three years, according to connected sensors used to provide
PwC. environmental metrics about extraction
sites.

Transportation Insurance
Connected cars are a top IoT device. We 74% of insurance executives said they
estimate there will be over 220 million believe the IoT will disrupt insurance
connected cars on the road by 2020. within the next five years, and 74% plan to
invest in developing and implementing
IoT strategies by 2016, according to an
SMA Research survey.

Defense Connected Home

We estimate spending on drones will By 2030, we expect the majority of home
reach $8.7 billion in 2020. In addition, devices shipped will be connected to the
126,000 military robots will be shipped in internet due to initiatives from device makers
2020, according to Frost & Sullivan. to connect everything they produce.

Agriculture Food Services

We estimate 75 million IoT devices will be We estimate 310 million IoT devices will
shipped for agricultural uses in 2020, at a be used by food services companies by
20% CAGR. These devices are primary 2020. The majority of these devices will be
sensors placed in soil to track acidity digital signs connected throughout
levels, temperature, and variables that grocery stores and fast-food companies.
help farmers increase crop yields.

Infrastructure Utilities
We estimate municipalities worldwide will Energy companies throughout the world
increase their spending on IoT systems at are trying to meet the rising demand in
a 30% CAGR, from $36 billion in 2014 to energy. To do this, they will be installing
$133 billion in 2019. This investment will nearly 1 billion smart meters by 2020.
generate$421 billion in economic value for
cities worldwide in 2019.

Retail Hospitality
Beacons, paired with mobile apps, are 31% of hotels use next-generation door
being used in stores to monitor customer locks, 33% have room control devices,
behavior and push advertisements to 16% have connected TVs, and 15% use
customers. In the US, we estimate $44.4 beacons throughout the hotel, according
billion will be generated from beacon- to Hospitality Technology’s 2015 Lodging
triggered messages. Technology survey.

Logistics Healthcare
Tracking sensors placed on parcels and We estimate 646 million IoT devices will be
shipping containers will help reduce costs used for healthcare by 2020. Connected
associated with lost or damaged goods. In healthcare devices can collect data,
addition, robots, such as the Amazon Kiva automate processes, and more. But these
robot, help reduce labor costs in devices can also be hacked, thereby posing a
warehouses. threat to the patients who rely on them.

Banks Smart Buildings

There are nearly 3 million ATMs installed 43% of building managers in the US
globally in 2015, according the World believe the IoT will affect how they run
Bank. Some teller-assist ATMs provide a their building within the next two to three
live-stream video of a teller for added years, according to a survey from Daintree
customer support. Networks.

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